In today’s market, sustainability claims are everywhere. These are marketing messages designed to highlight a brand’s environmental, social or economic responsibility, from sustainable product attributes to ethical business practices. As consumer awareness grows, so does the demand for genuine and transparent sustainability. 

In one of the sessions at the International Association for the Protection of Intellectual Property (AIPPI) held at the PACIFICO Yokohama, panellists discussed how many consumers find it challenging to understand the various labels and messages about the environmental performance of products and services. Greenwashing, for instance, makes untruthful or misleading claims about their environmental efforts, a practice that can deceive the average consumer into making a purchasing decision they otherwise would not have.

The global crackdown on deceptive claims

Regulators worldwide are taking notice and implementing stricter rules to combat greenwashing. The legal landscape is evolving rapidly to ensure that environmental claims are truthful and substantiated.

• Japan: Japan’s Act Against Unjustifiable Premiums and Misleading Representations prohibits greenwashing. Furthermore, Japan is moving towards mandatory sustainability disclosures for listed companies, with the Sustainability Standards Board of Japan developing standards aligned with international frameworks.

• European Union: The EU has been particularly active, defining specific “environmental characteristics” that can be claimed. It has targeted new forms of greenwashing, such as vague claims about future environmental performance and other illusory statements. The EU has also added specific greenwashing practices to a “blacklist” of commercial actions that are banned in all circumstances.

• Across Asia: The region is seeing a wave of new regulations. South Korea became the first nation in East Asia to draft a law that fines firms for false or exaggerated green claims. Financial hubs like Hong Kong and Singapore have made ESG (environmental, social and governance) disclosures mandatory for companies listed on their stock exchanges. While some countries like Thailand do not yet have specific legislation on green claims, the trend is clear.

• Other key nations: Australia has been proactive in taking action against greenwashing, while in India, regulatory bodies like the Consumer Protection Act, 2019 are used to tackle misleading environmental advertising.

The business case for authentic sustainability

Is there a commercial advantage for companies that genuinely invest in a green transition? According to the panel, the evidence points to yes, despite the challenges. While the high costs for resources and for substantiating environmental claims present a significant barrier, the benefits are compelling.

Companies that can authentically communicate their efforts can build significant brand trust and gain a competitive advantage. As consumer preference for sustainable products continues to rise, businesses that lead with integrity are better positioned for long-term success. They can effectively block competitors who rely on misleading claims and connect with a loyal customer base.

The role of technology and collaboration

Interestingly, the panel also discussed how emerging technologies can play a crucial role in supporting genuine sustainability and enhancing transparency.

• Artificial intelligence and the internet of things can optimize resource use and monitor environmental impact in real-time while blockchain offers a powerful tool for data verification, creating transparent and tamper-proof supply chains.
• Advances in renewable energy solutions are also making it easier for companies to reduce their carbon footprint.

Beyond technology, partnerships and collaborations are key to enhancing credibility. Cross-sector partnerships allow for valuable knowledge exchange and help strengthen the believability of sustainability initiatives.

- Excel V. Dyquiangco, reporting from Yokohama